Bitcoin not built to last, despite recent surge
To me, its fool’s gold. There are no financial statements, no balance sheets, no revenues or assets. There’s not even a physical product!
To me, its fool’s gold. There are no financial statements, no balance sheets, no revenues or assets. There’s not even a physical product!
In 2017, CNBC’s Jim Cramer said that bitcoin is a pure gamble and “kind of like Monopoly money. Obviously, there’s people who use it. If you ever say anything bad about it, there’s like this bitcoin mafia that comes after you. But it is an oddity that has nothing to do with us” as investors.
Nonetheless the bubble must one day pop and the fool’s gold vanish, leaving only fools.
The best analogy here is that the situation is somewhat akin to having a global economy based on a “bitcoin standard,” similar to a “gold standard,” except that the vast majority of the bitcoins are owned by just a few individuals.
So spare a thought for the companies scrabbling to jump off the bitcoin ship before it sinks.
This could have severe implications for average people hopping on the bitcoin bandwagon.
At around $11,500, the price of one Bitcoin is more than 40% below its record high of around $20,000 touched in mid-December, wiping approximately $140 billion off its market cap.
“I think it’s a huge danger right now that people are looking at this as the next great thing, it’s a bubble for sure.”
BITCOIN is finished, according to one of the industry’s most influential figures.
It’s on it’s way to zero — somewhere between zero and 200. It’s a utility token for criminals, terrorists, money launderers, tax evaders — they’ll always find some use for it.
“It will be doomed,” Tomlinson says. “Any disruption needs the consensus of the bitcoin community and that can’t even be realized when it comes to the transaction limit problem.
The reasons for Bitcoin’s troubles are many, including poor governance, a lack of technological infrastructure and infighting within its community.
“Bitcoin is a scam. In my opinion, it’s a colossal pump-and-dump scheme, the likes of which the world has never seen … Cryptocurrency is best-suited for one use: Criminal activity. Because transactions can be anonymous — law enforcement cannot easily trace who buys and sells — its use is dominated by illegal endeavors.”
It’s still a good reason not to use Bitcoin as a hedge against the expected market sell-off an electoral victory by Donald Trump would entail. There are other reasons, too. For one, Bitcoin is quickly becoming a thing of the past.
“Bitcoin is evil … So far almost all of the Bitcoin discussion has been positive economics — can this actually work? And I have to say that I’m still deeply unconvinced.”
“I’m betting that true decentralized cryptocurrencies will eventually become a sideshow in a corporate blockchain circus,” Biggs said.
“When asked specifically about the 12 month fate of bitcoin and Tesla—a stock emblematic of a potential tech bubble—a majority of readers think that they are more likely to halve than double from these levels with Tesla more vulnerable according to readers,” Deutsche Bank analysts wrote.
Sheila Bair, who was a key banking regulator in the heat of the 2008 financial crisis, says investors should avoid buying Bitcoin.
“It’s a way to purchase illicit goods, it’s a way to launder illicit income, it’s a way to develop and pay for cybercrimes and it’s a pure empty commodity,”
It won’t go quietly, but the recent precipitous drop may be the beginning of its inevitable and inexorable death spiral. Or there could be a dead cat bounce. Either way, I see bitcoin as a dead man walking.
He also said buying bitcoin was akin to gambling because it had the same level of risk.
Thanks to its ingenious, tamper-proof “blockchain” cryptotechnology (don’t ask), Bitcoin is absolutely safe. If you believe that, I have a Russian bridge for you to buy.
“Bitcoin is in no way a currency, or even a cryptocurrency. It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility. The Banque of France reminds those investing in Bitcoin that they do so entirely at their own risk.”
The move is not entirely surprising as the hype around bitcoin subsided long ago, and the digital currency remains a niche product for speculators or for clandestine online transactions.
If you ask Taavet Hinrikus, CEO of international-payments app TransferWise, “Bitcoin, I think we can say, is dead. There is no traction, no one is using bitcoin. The bitcoin experiment, I think we can say, is over.”
“Having no clear fundamental value and largely unregulated markets, coupled with a storyline conducive to delusions of grandeur, makes this more than anything we can find in the history books the very essence of a bubble.”
Berkshire Hathaway Vice Chairman Charlie Munger went a step further, saying at last year’s meeting that bitcoin is “just dementia.” “It’s like somebody else is trading turds and you decide you can’t be left out,” Munger added.
Bitcoin is a right-wing nightmare which facilitates tax evasion, money laundering and environmental degradation.
Bitcoin is a colossal waste of energy that will soon be no more. Good riddance.
What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that’s not at all what is happening in Bitcoin.
hile the Dutch Tulip mania almost four centuries ago has long been considered one of the largest bubbles of all time, Bitcoin and cryptocurrency mania has eclipsed it.
The price of Bitcoin, the best-known, rose from about $900 in December 2016 to $19,000 a year later. Recently, fear has been in charge. Bitcoin’s price has fallen back to around $7,000; the prices of other cryptocurrencies, which followed it on the way up, have collapsed, too.
Blockchain doesn’t even solve most problems of trust. The integrity of data on a public blockchain can be trusted not to change, but that says nothing about whether the data is right in the first place.
“The real-world uses of Bitcoin are largely things the government doesn’t want you to do,” Popper told me. “It has proved to be successful and effective for drugs and for black markets.”
Bitcoin was never more than a vehicle for tax evaders and grifters to burn carbon in the hope of scoring a hot new Lambo. It represents all of our worst excesses, and it does so at a huge cost both to the people and our planet.
No one with an interest to store value would want to hold bitcoin for any period of time as a result.
“We don’t see them becoming part of mainstream investment portfolios soon,” he adds.
During the debate, Prof Roubini, a long-standing critic of Bitcoin, argued it was destined to end up in the “museum of failed coins” with all the other digital currencies.
Bitcoin will soon be worth zero. But until then criminals will still be able to use it and other digital currency to move money around the world without being caught.
There’s no fundamental value with Bitcoin, . Get out if you don’t want to lose all of your money because … there’s a very good chance it’s going to crack.
Cryptocurrencies are “just Candy Crush” … There are now more than 1,300, “and it seems reasonable to assume all 1,300 are not of equal quality … the return-on-investment could be considerably lower than investors currently expect”
According to new estimates, weak demand and the possibility of investors withdrawing their profits , prevents BTC from returning to the values of two weeks ago.
“But people who are buying it at these prices or higher prices are going to lose practically everything,”
Very few people have followed it like I have for five years and still find it ridiculous, but that’s because I’m an academic and I have the space to do it and I find parts of it, especially the criminality, interesting.
What Buffett was saying about bitcoin was that you can buy it, but it will never produce anything of value.
Sooner or later, something will happen to trigger a major sell-off, and then all the bitcoin investors will realize they built their fortunes on sand.
“People who are buying it are going to wake up one day and they’re just going to be a bagholder,” he concluded.
If you’re thinking about investing in Bitcoin, Howard Marks thinks you should think twice. “They are “not real!!!!! Nobody has been able to make sense to me of these currencies.”
“Bitcoin is more like a limited edition toy than an investment,” says Zac Bissonette, the author of The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute. “It has no value except for the sheer hope that it will one day become valuable”
Despite the much advertised decentralization of cryptocurrencies, these historical central banking issues of institution quality and governance quality seems to matter a lot. And for Bitcoin this seems like bad news.
But that dream is now effectively dead, and blockchain is now fully into its boring phase. The latest and most telling evidence of this arrived this morning, when JPMorgan (JPM) said it had developed and tested a prototype of a digital coin.
Currently, Bitcoin maximalists can’t even persuade other Bitcoiners to support their coin. The idea that they could persuade all the people of the world to throw away their tribal currencies and adopt their version of Bitcoin is laughable.
Here, he dismisses the cryptocurrency as an article of faith, a poor excuse, in his view, for a reliable investment because it produces no income.
These things usually end poorly, and bitcoin probably won’t be any different.
Manipulative actors have been known to take advantage of the madness of crowds.
Bitcoin breaks my heart. Not because I missed the great run-up (though I did) and not because I fear that the Bitcoin bubble will end badly (it will, but that’s not my problem).
“It’s not an effective storehold of wealth because it has volatility to it, unlike gold.”
In a lecture given in Frankfurt, Germany, Carstens said there were cracks appearing in the “house of bitcoin” as too many copycat currencies had forked off the technology
The cryptocurrency is worthless, even if blockchain technology could bring significant benefits to investors, said the investment arm of Europe’s biggest insurer.
To be clear, Bitcoin is absolutely worthless by any real measure. It’s fake money that’s about as practical to use in the real world as Monopoly bills.
Meanwhile bitcoin and the like will quickly fade into financial history, just as tulipmania did, serving solely to remind future generations of the folly of gambling on illusions of value.
Let’s also bear in mind what it is that makes some venture capitalists Bitcoin zealots: pure greed. That is the reason clearest to me for Bitcoin’s failure.
“Humans buy all sorts of things that aren’t worth anything,” Greenspan said. “People gamble in casinos when the odds are against them. It has never stopped anybody.”
“The main problem with these things, the absolute fundamental flaw, is that they’re never going to be a store of value,” he said.
“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,” “It’s just not a real thing, eventually it will be closed,” Dimon said.
This is a long-term unraveling of all of the lies, exaggeration and populist fantasies that drove last year’s market mania.
The bitcoin boom may be over. And the death of the cryptocurrency craze may well come at the hands of government regulators.
Kovacevich says he believes bitcoin is a scam. “It makes no sense. I’m just surprised it isn’t even lower.”
Remember the hype over bitcoin? The crypto-currency that so tantalized techies and excited investors is today in a sorry state: Its core supporters are at war with each other and ordinary consumers still don’t care about this supposedly revolutionary form of money.
Why are we giving Bitcoin house room? Surely it is akin to a counterfeiting scam promoted by people who like the idea of their computer making them rich without lifting much more than a finger?
Main credible reason presented for the rise – Pump and dump schemes verified and predicted by the influx of Tethers to market manipulators.
And today, you can see something similar going on with another group of failing zealots. I’m talking about the cult of Bitcoin.
Bitcoin’s price is $8,700 (as of 03/22/18). As bullish sentiment continues to fade away, the price declines.
Bitcoin is a liability of nobody. This is its fatal flaw as a currency. There’s nothing to stop its value from falling to zero.
Congress got to hear a lot of nice things about Bitcoin from regulators this week. If you think that’s good news for Bitcoin, you’re missing the point.
Unlike stocks and bonds, currencies generate no cash flows such as interest payments or dividends that can explain their prices,”
What we are seeing right now is the end for BTC. The huge speculation bubble was overblown and people saw that and rightly sold off. Good for them.
Bitcoins aren’t secure, as both the recent theft and this password problem show. They’re not liquid, nor a store of value, as the price collapse shows and if they’re none of those things then they’ll not be a great medium of exchange either as who would want to accept them?
If I waste £150 on employing labourers to find and exhume the buried remains of my childhood pet tortoise from my parents’ garden, those costs don’t make the skeleton worth £150 to an investor.
“I never considered for one second having anything to do with it. I detested it the moment it was raised,” Munger said at the annual meeting for Daily Journal Corp. in Los Angeles. “It’s just disgusting. Bitcoin is noxious poison.”
“One moment you will be looking at US$8,000 per coin, the next, global trading will be suspended. The true market of BTC is zero. When it’s stopped, it will just end.
Anyone who holds them will scramble for the exit, raising whatever cash they can. And there is at least an even chance that this is what is happening now.
Putting aside the fact that the Bitcoin crash is teaching idiots a lesson, there really is a reason you should care about this.
It’s hard to see any real case at all for the 14-fold increase in bitcoin prices during 2017, or the 30-fold increase since the start of 2016. Actual transactions in bitcoin remain very small. Only a few hundred thousand merchants supposedly accept bitcoin, and many of those businesses are shadowy or worse.
“I would be pretty cautionary about it. I think that it’s not a stable store of value,” he said at an event in New Jersey. “I would be, at this point, pretty sceptical of bitcoin,” he added.
Got it! Ponzi scheme. Confidence game. Fraud. Anyway, bitcoin is headed for a value of zilch. It’s only a matter of when.
He added that he’s “amazed by how people are so excited about it” and that he tells his students that “No, it’s not such a great idea.”
I’ve said the same thing when a bitcoin was selling for $20,000. And still was saying it when it plunged to $4,000. Its real worth: $0.
Scammers are intentionally pumping the value of Bitcoin much higher than it deserves to be so that they can then unload their Bitcoins on suckers who are willing to jump at what is being pitched as “the next big thing” that they don’t even understand.
Uber has “quickly dismissed” the idea of buying bitcoin with the cash on its balance sheet, CEO Dara Khosrowshahi told CNBC. “We’re going to keep our cash safe. We’re not in the speculation business,” he said.
Lack of media and public interest bode poorly for the long-term future of the virtual currency, even though it has regained much of the value it lost in 2014
But the main factor driving down the price of bitcoin is likely to be a realization that it is simply not a credible long-run alternative to conventional currencies
I’ve been calling it a “bitcon” for a long time. And now the pyramid seems to be collapsing because fewer and fewer people have confidence that the price of this inherently worthless “cryptocurrency” is going to continue to rise.
David Rosenberg, founder and chief economist at Rosenberg Research, says Bitcoin is extremely difficult to value and is “not really a valid investment thesis.”
“It attracts charlatans,” Buffett said. “If you do something phony by going out and selling yo-yos or something, there’s no money in it — but when you get into Wall Street, there’s huge money.”
I’m told that there are apocalyptic, the-end-is-coming guys who are accumulating bitcoin because once we turn into a Mad Max wasteland, having a digitally distributed – nevermind.
Weber approached it from a different angle, essentially saying that bitcoin cannot by printed by governments in times of need.
Billionaire hedge fund manager Ken Griffin said he questions the value of cryptocurrencies and laments how younger investors have been attracted to the digital coins rather than stocks of companies that drive economic growth.
If you invested $100 in Bitcoin when each news item was published, your total investment would have been $10,200.
Today your total investment would have been worth $2,665,057.
Don't buy Bitcoin, they said.